Blogs

fin goal

The importance of creating a financial plan and setting financial goals

December 12, 20222 min read

Creating a financial plan and setting financial goals are essential steps towards achieving financial stability and security. A financial plan is a roadmap that outlines your financial goals and the steps you will take to achieve them. It can help you track your progress, identify potential challenges, and make adjustments as needed. Setting financial goals, on the other hand, gives you a clear target to work towards and helps you stay motivated and focused.

According to a survey conducted by the National Financial Educators Council ([1]), only 41% of Americans have a written financial plan, and only 53% have set financial goals. This is a concerning statistic, as it means that a significant portion of the population is not properly planning for their financial future. Without a financial plan and financial goals, it can be difficult to make informed financial decisions, track your progress, and stay on track towards achieving your financial goals.

There are several benefits to creating a financial plan and setting financial goals, including:

Improved financial stability: A financial plan can help you manage your finances more effectively, identify areas where you can cut costs, and allocate your money towards saving and investing for the future. According to the Federal Reserve ([2]), the average American household has about $11,700 in savings, but experts recommend saving at least three to six months' worth of expenses in an emergency fund. By creating a financial plan and setting financial goals, you can improve your financial stability and protect yourself in times of need.

Increased clarity: A financial plan and financial goals can help you clarify your financial priorities and make informed decisions about your money. According to the U.S. Bureau of Labor Statistics ([3]), the average American household spends about $61,224 per year. By creating a financial plan and setting financial goals, you can identify your most important financial priorities and allocate your money accordingly.

Greater motivation: Financial goals can provide motivation and keep you focused on the big picture. According to a study conducted by the University of Scranton ([4]), only 8% of people achieve their New Year's resolutions, but those who set specific, measurable, achievable, relevant, and time-bound (SMART) goals are more likely to succeed. By setting SMART financial goals, you can increase your chances of achieving your financial objectives.

By creating a financial plan and setting financial goals, you can take control of your financial future and work towards a more secure and stable financial position. It's important to be proactive in your financial planning and to consult with a financial professional to determine the best approach for your specific situation.

References:

[1] National Financial Educators Council. (2018). Survey reveals many Americans lack financial plan, goals. Retrieved from https://www.financialeducatorscouncil.org/survey-reveals-many-americans

Back to Blog

Our Commitment

As licensed financial professional, We focus on you and your needs, goals, and objectives. We strive to help individuals, families, and businesses create a sound strategy for the future focused on reducing debt, saving money, protecting those things that are most valuable to you, and helping entrepreneurs reach their dreams.

Financial Literacy Crusade

© Copyright 2023. All rights reserved.

Contact